Sub-prime money lending in the UK is alive and well. Demand for Payday Loans, Logbook Loans and Guarantor Loans is soaring. And with the country’s recessionary phase now into its fourth year, these high-interest short-term loans that were previously only popular with the sub-prime sector are now being taken up by so-called ‘Middle England’. In many cases, this group of newly-stretched individuals is also resorting to more ‘respectable’ sources of personal credit such as P2P Lending (aka Peer-to-Peer or Person-To-Person Lending), pawnbrokers and pre-paid credit cards. For the more prudent, there are always old standbys such as Credit Unions. What’s going on in our economy that’s driving so many people into the arms of ridiculously expensive lenders and online opportunists who are charging outrageously high interest rates of up to 4,000 per cent APR in the case of Payday Loans? Let’s take a closer look at the type of credit we’re talking about: Payday Loans The bête noir of the sub-prime stable, these online loans are surrounded by controversy, largely on account of their sky-high annual interest rates (APR). Although Payday Loan companies were originally given a green-light by the Office of Fair Trading, a rash of recent complaints about their aggressive chasing of defaulters has led to closer scrutiny of vetting procedures and in some cases the withdrawal of their licences to trade. Logbook Loans On the face of it, a short-term loan using your car as security seems like an OK kind of idea. You hand over your V5 Registration Document (formerly known as a ‘log book’) for the duration of your loan. When you’ve paid it... Read more...